With more than 200 million citizens, Nigeria offers opportunities to entrepreneurs who can provide residential real estate solutions.
“You can make a huge amount of money, especially if the development is located close to universities or colleges,” says Kolade Ajani, founder of bespoke furniture manufacturing company, WOOD-ET AL.
“Many people still lack shelter and need to rent a place to live, especially those moving to the city to make a living or for attending university to obtain a skill.”
This makes property development a good business to pursue, but it is not without challenges, Ajani says.
“The land registration process in Nigeria is frustrating. Real estate agents, developers and lawyers can relate to this challenge. It can last as long as six months to two years with procedures costing up to about 20% of the value of the property.”
Another challenge is the weakening of the Nigeria naira. “The Nigerian construction industry depends mostly on the importation of raw materials and equipment. With such an unstable currency, the cost of these raw materials increases, and the market bears the brunt.”
Multiple taxes and levies could also deter those interested in developing more real estate options, according to Ajani. However, he believes the benefits of stable cash flows and a passive income make it worthwhile.
According to a report by Northcourt Real Estate, developers should focus on projects that offer mixed-use solutions – combining residential, retail, office and healthcare. The report further highlights that demand for residences in gated estates will continue to be in demand.